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The novel begins with Ponyboy, the narrator, leaving the "darkness of the movie house." He has just seen a Paul Newman film. He describes himself for the reader, physically, and notes his household situation: he lives with his older brothers, Darry and Soda. Their parents were killed in a car accident, and the boys can "stay together only as long as we behave." He also describes his social status, which is that of a "Greaser".
Ponyboy grows nervous that he's walking alone, since Greasers often get jumped by Socs, "the jet set, the West-side rich kids." As soon as he has this thought, a red Corvair starts following him, and he starts sweating and getting scared. Soon he is surrounded by Socs. One of them flips out a knife and asks if Ponyboy needs a haircut; he is overpowered by them, with the knife to his throat, and starts screaming.
A scuffle ensues, and Ponyboy is helped to his feet by Darry, his oldest brother. The Greaser gang has chased away the Socs. Sodapop, Ponyboy's other older brother, comforts him as he cries, and soon the whole gang comes back. They've chased the Socs away with rocks. Ponyboy describes Steve Randle, Two-bit Mathews, Dallas Winston, and Johnny Cade to the reader; they compose the Greaser gang.
Ponyboy is bleeding where the Soc cut his face. Soon Darry starts scolding Ponyboy for walking home from the movies by himself, and Ponyboy explains to the reader that "Me and Darry just didn't dig each other. I never could please him." Soda sticks up for Ponyboy, as he usually does.